us stock market, stock split

Begin Part 2 of 2

SUBSCRIBER QUESTIONS

Q: Could you not by puts or go short for NVLS if you don't already have a position? Thank you for a reply.

A: Last night we were looking at NVLS as a covered call candidate on the Daily as a stock we had previously taken positions on and was ripe for a pullback. We know that stocks will inevitably pullback no matter how strong they are, and if we are going to hold onto the stock during the pullback, we can sell some calls on it, let it fall, and then buy them back when it hits support and starts to rebound.

That is the same theory of puts or going short: the stock is going to fall. That can be played with puts or short selling as well. The usual precautions apply: is there enough room on the fall down to support to cover the spread and give us a safe enough return?

PLAYS TO LOOK AT: Nice moves still happening, with CUB continuing its pre-split run, RYL running yet again and SUI continuing its breakout. Lots of good patterns out there that can make us money!

BONUS PLAYS: SHFL looks like a bounce, while IEX and ETM are still set up well.

SY (Sybase--$18.00; -0.10; optionable): Application software.
http://biz.yahoo.com/p/s/sy.html
STATUS: Like most of the techs, SY is working its way back up from the depths, and has been trending up along its 50 day MVA (currently 16.90) for several months, taking regular bounces. The last bounce found resistance at the most recent high, but after that solid move up the pullback has been on much lower volume, and SY is holding over its short-term MVA's (18 day at 17.46), today with a second consecutive loose doji. Setting up an ascending wedge, and we can look for SY to make the breakout. Good buying and money flow is picking up. Target: 21.50.
BUY POINT: 18.80 on volume of 675,000 (average 510,000; today 355,800). 17.50 (7%). The more aggressive entry is over Tuesday's high of 18.50 on the same volume. Stop: 17.50.
POSITION: Stock and/or June $15 calls to buy (SY FC).

CMX (Caremark Rx--$17.90; +1.15; optionable): Pharmacy benefit management.
http://biz.yahoo.com/p/c/cmx.html
STATUS: Recently broke from a reverse head and shoulders and moved up toward the left-side highs of its larger cup pattern. CMX hit up to that level (18) and formed a handle over the last month, testing back close to its 50 day MVA (16.55) in recent days but blasting back up today on big volume (2.4 million; average 1.57 million). Strong move, and looking for a breakout. The all-time high is an intraday spike from last July at 18.50. Target: 21.
BUY POINT: 18.10 on volume of 2.4 million. Stop: 16.83 (7%).
POSITION: Stock and/or June $15 calls to buy (CMX FC).

MDR (Mcdermott Internat--$14.64; -0.06; optionable): Oil & Gas equipment.
http://biz.yahoo.com/p/m/mdr.html
STATUS: Made a huge gap up in early February on an asbestos ruling, taking it up to the left side highs of its cup (dating back to May). MDR hit a high of 15.17 on that move, and since has pulled laterally, forming a handle in a pennant shape as it moves over the support of its 10 day MVA (14.39). It has pulled back the last week, with volume low, showing dojis the last two sessions after tapping the 10 day at its intraday lows (volume today 256,900; average 477,400). Looking good for a move and breakout. There is a high from early 2001 at 16.85. Excellent money flow and buying. Target: 17.50.
BUY POINT: 15.27 on volume of 715,000. Stop: 14.20 (7%).
POSITION: Stock and/or May $12.50 calls to buy (MDR EV).

MARKET FAVORITES:

BRCM (Broadcom--$40.04; -0.46; optionable): Semiconductor.
http://biz.yahoo.com/p/b/brcm.html
STATUS: BRCM gave us some decent put plays, but it ran hard out of the last one, blasting back up with the sector over its 200 day and 50 day MVA's (38.44 and 39.61, respectively). Volume was great on the move, and today we got the rest we were looking for. BRCM settled back slightly on lower volume (21.1 million; average 14.2 million), but held the 50 day with a loose doji. Not bad action after a solid run up that took out resistance. We are looking for it to consolidate some more above the 200 day MVA and then rally again. Patience. We can try to cash in on the upside in a strong market after getting hit on the last put play. Target: 47.
BUY POINT: In a strong market, 41.12 on continued strong volume. Stop: 38.24 (7% & just below the 200 day).
POSITION: Stock and/or May $35 calls to buy (RCQ EG).

PRE-ANNOUNCEMENTS: MUR is trying to breakout, and KRI, MRBK, RNR and SUI look good in their patterns.

DRYR ($43.50; -0.08): Forecast to announce a split with earnings on 4-24-02 before the open. Still in the double bottom with handle, with the handle gradually descending with volume dropping (today 149,000; average 257,400). Great action, and the breakout is 44.98 on volume of 370,000, with stock.

LSTR ($88.40; -0.60): Researching a new date. Has made a great run back up from below the 50 day MVA (currently 80.44), and LSTR made a break to a new high Monday with great volume. The last two sessions LSTR has rested, but held over the prior high (87.35) with a couple of dojis on much lower volume (down to 47,500 today; average 64,600). Good action on a test of the breakout, and we are looking for a new move from here. On a move over 89.30 (perhaps after a further test of 87.50) with above average volume, stock.

CTAS ($49.75; +1.89): Researching a split date. CTAS has powered back onto the radar screen, moving up strong volume the last few sessions. Today CTAS closed just below recent high and its down trendline (connecting December, July and January intraday highs, at 50.75). Volume continued to be solid on the move up today, at 1.23 million (average 941,000). Looking for a break over the trendline with continued volume over 1 million, although at this point CTAS could rest and form a bit of a consolidation before punching through. Stock and/or May $45 calls to buy (NQQ EI). Target: 58.

ACDO ($53.69; +0.77): Forecast to announce a split with earnings on 4-29-02. Looking good in its pattern, a pennant which has taken on the look of an ascending wedge in its tightening tip. Setting up with nice, low volume (today 374,100; average 588,000) as it holds the 18 day MVA (52.58), and we are looking for volume of 800,000 at a buy point of 54.89, with stock and/or May $50 calls to buy (DZU EJ).

DRS ($42.75; +1.80): After pulling back from its intraday move Tuesday, DRS made a move today, although volume was much lower at 216,000 (average 243,500). The pattern is a cup-shaped handle to a larger cup pattern, overall making something of a large ascending wedge. After the low volume on today's move that took it to just under the recent high (43.10), we could see DRS test back, and we would expect it to hold the 18 day MVA (39.55) for another run at the breakout. From here, looking for volume increasing to 370,000 for a buy point of 43.20, with stock and/or June $40 calls to buy (DRS FH).

PRE-SPLITS: WERN and JEC could still move, and CUB closed just below our target (got there in a hurry!).

DF ($72.30; +0.08): Splits 2:1 effective 4-25-02. In the handle to its cup pattern, which dates back to late December (high of 72.47). The stock showed a doji today on low volume (241,200; average 559,400), and we could see another test of the 10 day MVA (71.19), but from here or there, looking for the breakout, which is 73.50 on volume of 840,000, with stock and/or June $70 calls to buy (DF FN).

GILD ($73.20; +0.21): Splits 2:1 effective March 8. We were looking for GILD to hold 71-72 and set up a last pre-split move, and indeed today GILD gapped back to the 10 day MVA (70.90) and then pushed back up hard (volume 3.94 million; average 2.17 million). Strong bounce, and we can look for continued momentum from here with what will potentially be a quick play. On a move over 73.50, stock and/or May $65 calls to buy (GDQ EM). The high (all-time) from Tuesday was 75.80. After the great move, GILD started up again today, looking strong. However, it ran out

CONTINUING CANDIDATES: RARE still looking good, but AZO took a rather strong bounce so we are watching put positions.

THQI ($51.00; -1.19): Made a nice move over the 200 day MVA (50.16) with a solid run, and we were looking for a lower volume pullback to hold that level after Tuesday's pull off of the intraday high (53.50). Today THQI did dip back on lower volume (1.11 million; average 1.45 million), tapping the 200 day at its low. Looking for a hold, and a move over 52.20 on volume of 1.7 million or better. Stock and/or June $50 calls to buy (QHI FJ).

PII ($57.90; +2.25): After its extended (six-week) ride along the 50 day MVA (55.68), PII has made a very nice move this week. Today PII broke to a new high, triggering an alert as it moved on increased, strong volume (239,900; average 117,500). Still a buy on strong volume up to 62.92, with stock and/or June $55 calls to buy (PII FK).

POST-SPLITS: VAR could give a 50 day MVA bounce. BLL made a move up yet again.

BSG (formerly BSYS-- $33.01; -0.01): Splits 2:1 effective 2-25-02. Holding its prior highs on the test, showing a 'star' doji today on much lower volume (421,600; average 560,000). If it can hold, we can look at positions on a move over 33.50 on above average volume, with stock and/or June $30 calls to buy (BSG FF).

XRAY ($33.81; -0.19): Split 3:2 effective February 1. The bounce from the 50 day (33.13) fell short of the high (34.36; intraday spike in December hit 34.69), but it is holding onto the short-term MVA's (18 day at 33.60), today on lower volume of 436,000 (average 293,000). If it can hold and make a higher low, it will set up an ascending wedge, and we will look for a move over 34.36 on increased volume. Stock and/or July $30 calls to buy (XEQ GF - no open interest as yet). The move over the high is 34.79.

Good Investing!
Jon L. Johnson and the Stock Split Report Staff.

All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.

us stock market
stock split